FinTech in 2022, remains one of the UK’s biggest exports. Last year #DisruptionBanking had the opportunity to partner with the UK FinTech Mission to Western Europe. This year we joined the event again. Many of the topics centred on Technology. And one of those topics focused on how WealthTech and FinTech can help Levelling Up within society.
Last year the focus of the event was around the topic of Green FinTech and Sustainability. This year’s event was the seventh FinTech Mission, and it focused more on Technology and Digital Finance.
Her Majesty’s Ambassador Jane Owen welcomed attendees and some of the best FinTech StartUps from the UK to the event. She is the current British Ambassador to Switzerland and Liechtenstein. Before that the Ambassador was once the COO of UK Trade & Investment.
This year Her Excellency started her welcome by sharing her thoughts on the difficult times we all face. She stressed how important it was “that we can, at times like this, bring together the political and foreign policy work that we are doing along with the economic work. Including sometimes when that involves sanctions and standing up for humanitarian values that we all espouse.”
FinTech is a huge industry in the UK, with over £30 billion of investment, Her Excellency explained. Climate change and digital development remain constant priorities. However, the other point the Ambassador raised was about “levelling up”.
In the UK people have been discussing “levelling up” for some time. Polarisation is something that could be solved through WealthTech, “and particularly the digital angle of that.” The Ambassador feels that this technology is important because “It can help to raise the sort of capital and target capital in a way that can actually help our democratic societies to succeed.”
What about the Technology?
37 Fintechs and 150 participants joined Manuela Andaloro, CEO of SmartBiz Hub, for a panel discussion with 5 others. The panel focused on the role of technology in the democratisation of wealth management. On Data and Artificial Intelligence. And on promoting increased product customization, but also higher financial awareness.
One of the FinTech StartUps who presented earlier in the day was TAINA Technology. #DisruptionBanking met with Maria Scott, CEO of TAINA last week to find out more about how the StartUp helps financial institutions. How their technology can help them:
Susanne Chishti, CEO & Founder FINTECH Circle, who was on the panel, brought up the example of another female entrepreneur. The CEO of PensionBee. A FinTech which helps companies and individuals aggregate their pension under one platform. Susanne used the company as an example of how FinTechs can make our lives easier and help with the levelling up process too.
Kyriakos Voutsas, Managing Partner of Accenture shared his thoughts about FinTech StartUps next. He highlighted how “the ones [FinTech StartUps] that are successful are not the ones who are innovating in AI. They are the ones who understand the business model, the basic needs of the clients.” Kyriakos continued by explaining how these StartUps “have an idea on how to disrupt those routines and how to bring those products and services at a better price and a better time. Through better engagement through better personalization.”
Focus on Financial Literacy to help Levelling Up
Better engagement with customers can help raise financial literacy. FinTechs often look to Tech Giants, Netflix and Amazon for examples of customer engagement. Kyriakos takes this a step further by adding that financial institutions should start with improving the financial literacy of their clients and people in general. He shared how “we currently don’t have pricing transparency, service transparency, or an understanding of what it means to have a pension product. Understanding what it means to put aside money every month.”
On the topic of putting money aside every month. Another of the FinTech StartUps who were part of the mission was Plutus. Their team at Plutus are involved with blockchain technology. And Plutus has a token listed on Coinbase as well.
Plutus engages ambassadors to increase engagement of their product. Rewarding their users. This in turn helps their customers to save. It might have some of the solutions that Kyriakos was looking for.
WealthTech as a Segment of the FinTech industry
How far has WealthTech as a segment of the FinTech industry come so far? Sabine Van der Linden, CEO the Alchemy Crew explained some of the numbers. She shared how around 4000 ventures have raised around $100 billion in funding. Whereas FinTech has raised $700 billion in funding over the last 10 years.
Sabine highlighted how in 2021 $21 billion was invested in investment technology ventures. Which was three times more than 2020. And the best year ever for the WealthTech and investment markets. Some of the stand-out FinTechs in the space include Ally Bank and eToro. These Sabine described as “online tool platforms.” She explained how these platforms and platforms like them were one of the most successful WealthTech StartUp sectors right now.
Betterment and Seedrs were the next WealthTech StartUps whom Sabine mentioned. Both are examples of equity and crowdfunding platforms that form the second growth area that she sees. Finally, she explained how the next category was what some call the “wealth management platforms”. Here Sabine introduced Stash, worth over $1.4 billion according to a recent story. She explained how when it comes to FinTechs like Stash, “that’s where you start also looking at technology. A combination of technology coming together to start driving differentiation and reducing the price for the consumer.”
Social Innovation in Society
People believe that technology can be the solution to everything, Sabrina del Prete, CEO of Kore Labs shared. She suggested that “when we talk about technology and artificial intelligence. We have to think about the fact that technology is a reflection of the way that we think and the way we operate.”
The subject of bias, when it comes to artificial intelligence, is a known shortfall of the technology. This is a good reason to keep the human involved in the process for Sabrina. She thinks that sometimes the bias is created because of the type of data that is analysed. There is a lot of ethical questions around artificial intelligence. She explained how “the easiest thing to do is to use technology together with human judgement and the two together may be able to evidence when these situations happen.”
Sabrina shared how 80% of the working population in the UK earned less than £30,000 per annum. It’s fair to assume that most of them are interested in getting advice regarding their pensions. However, the ability to pay for investment advice might be considered out of reach for them. Part of the solution, Sabrina feels. Is that if the right information, or the right language, is fed to the technology. Then the results that are produced can be much better than any results being produced today. Allowing for cheaper access to solutions for people, and for better outcomes.
Levelling Up starts with the youngest in society
Financial planning may not be on most young people’s minds. Azzurra Rinaldi, Director of the School of Gender Economics at the Unitelma Sapienza University of Rome shared her insights on the topic.
To open the debate on levelling up. Azzurra shared how in Sweden people were raised to show distance and respect to money. This behaviour is culturally determined she shared.
Azzurra also believes that people need to make financial choices earlier in their lives than they often do today. This could be through the implementation of financial obligations within the younger generations. Which will hold them in good stead when they are older.
Technology and Social Change
Towards the end of the event Stefan Flückiger, Deputy State Secretary for International Finance at the Swiss Federal Department of Finance (FDF) spoke about the conversations he’d heard. He explained how it reminded him that it’s now a different conversation. Today Stefan believes that the conversation is about openness, it’s about sustainability. He described how it’s a completely different universe from the discussion about finance that people were having 10 or 20 years ago.
“What we are witnessing is a real disruption in more than one sense. It’s a conversation with different actors from my personal perspective,” Stefan explained. Talking about some of the sandboxes he has helped with, he shared how “there were a lot of people without ties, wearing turtlenecks, wearing sneakers. It was a totally different discussion.”
Stefan pointed out a recent report that his department had worked on for the Swiss government.
The report focuses on the digitalisation of the Swiss financial market. Stefan explained how the report was just a starting point for more in-depth work in the years ahead. He believes that the Federal Council sees great potential for Switzerland as a business location in the digitalization of the financial market.
“And the clear ambition is to be one of the world’s leaders in digital finance,” Stefan shared.
The Swiss government are taking FinTech as seriously, just as the British government is. With the country’s rich heritage in the financial sector, it appears to be a natural evolution. Discovering what the best UK FinTech StartUps have to offer is just one way for two financial centres to co-operate. It may also help all the countries involved in this week’s event to give the levelling up process a big push together.
We look forward to covering the UK FinTech Mission to Western Europe next year.
Author: Andy Samu
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